Rebate, smebate.
9th February 2008
Jerry Pournelle explains the “rebate”.
A government running a deficit has no money to “rebate”; it has to borrow the “rebate” money, and that means it must collect it back along with the interest it cost to borrow it. Why be astonished?
In the US the problems are two-fold. First the housing bubble, caused by government pumping money out and financial rulings that allow lenders to sell off shaky loans packaged with sound ones. The intention was to make it easier for people to own homes; the result was the inevitable bubble. Another result was to put temptation in the way of people who would not normally be thieves. If you allow someone to loan money with no consequences for making bad loans, and pay them according to the number of loans they make, then you have put enormous temptation in their path; and this is not an age of Saints.